Semi Commercial 
Mortgages

 

Up to 75% Loan to Value

Terms from 3 months to 30 years

Interest only available

Semi Commercial Property

Looking for a Semi Commercial Mortgage?

We specialise in Semi Commercial or Mixed Use Property Finance in the UK whether you are looking to purchase or refinance. 

How can we help?

  • Whole of market – We can compare most UK lenders who are prepared to provide semi commercial mortgages.

  • Term length– We can arrange both short term and long term lending options from 3 months to 30 years.

  • 75% Loan to Value – We can source semi commercial mortgages up to 70% of the property value (in some cases this can be higher).

  • Finance within a short period of time – We can secure the funding you need swiftly.

The following topics are covered below

What Is A Semi Commercial Mortgage?

Semi- Commercial mortgages are used to purchase or refinance property that includes both commercial and residential elements, often referred to as a mixed-use property. 

 

In layman’s terms, mixed-use property is a combination of a residential property (whether that be a buy-to-let or a standard home) and a commercial premises.

 

Some examples of mixed-use properties include an office, store or retail outlet with a domestic residence above it, all of which are included in the same freehold agreement. Other examples include guesthouses in which the owners themselves live and public houses above which the proprietor has a permanent residential address.

How do I know if I need Semi-Commercial Mortgage?

If the property you're considering buying or refinancing has a combination of both residential and commercial floorspace, the likelihood is yes.

 

In scenario's where the residential element of the development in question has a higher percentage, it would still be classed as mixed-use. 

The only exception would be if the residential portion of the building has a separate entrance, so the occupier would not need to set foot in the commercial floorspace to access their home. In this case, two separate mortgages could be taken out on the property, one commercial and the other residential.

Take note: Lenders view the classification of semi-commercial and commercial very differently. Generally speaking lenders work on a 60/40 square footage rule.

What is the Eligibility Criteria For A Semi Commercial Building?

Commercial mortgage lenders assess applicants based on the below factors:

  • Affordability

  • The amount of deposit you have

  • Credit rating

  • Trading history

  • The strength of the asset

Read on to further understand each criteria in more detail:

Affordability:

When assessing semi commercial mortgage affordability,  the lender will want to see that the business or individuals projected income is enough to service the loan. 

Business lenders assess this by looking at earnings before interest, depreciation and amortisation (EBITDA),  but there is no hard and fast rule on borrowing based on this. 

It's important to have strong accounts as the lender will need to be confident with the company's operating performance. If the business has not been performing well enough, some lenders will need other declared income. 

Deposit Requirements:

Generally speaking the deposit requirements for semi-commercial properties is similar to commercial. ranging from 20-40%.  and is assessed based on the level of risk and whether it's owner occupied or not. 

Credit Rating:

Tier 1 and 2 lenders prefer to deal with borrowers whose credit report is excellent, and some are more flexible when there is bad or adverse credit 

The market is vast, and with a whole of market broker by your side you'll have a better chance of finding a lender who specialises with specific credit issues whether it is a missed credit card or phone bill or a CCJ. 

Trading History

Some lenders will only offer a semi commercial mortgage if there is a strong track record in a stable business. With higher risk sectors such as retail, most lenders will require a few years financial accounts with strong trading behind the company. 

However, there are lenders that cater for first time investors and start ups provided there are strong projections and a solid business plan

The strength of the asset

Most commercial lenders will only offer a mortgage if they’re convinced the investment and asset is viable, and they will judge this on with a number of factors including the location, rental stream and capital growth in the area

 
 
 

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